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“We are accustomed that Georgia is rich in water, though this does not mean that it does not need to be managed. As the temperature rises, this available resource diminishes and its distribution is uneven (75% of water is in Western Georgia). Such a state of affairs makes it clear that the water resources need to be used in a rational and sustainable way while this requires a certain type of strategy,” said Mariam Makarova, head of the water resources department at the Ministry of Environmental Protection and Agriculture.

In addition to irrational use, the system faces another significant challenge –pollution. For example, at the end of 2016, nitrogen concentration in the Black Sea basin exceeded the permitted norm as much as four times (2016 UNECE report).

To improve water quality and distribution, the state committed to fulfiling a number of directives specified in the Association Agreement with the EU and now works on drafting new legislation to replace the Law on Water adopted in the 1990s.

“That the EU Association Agreement provides the state with a general guidance in the reform process is one thing, but that this process is participatory and involves all participants is another thing. The involvement was our goal when we financed an ISET study into economic instruments for water resources management. The objective of the study was to analyze the existing situation and needs and to provide concrete, time-bound recommendations to the government in the process of reformation of the water resources system,” said the President of Europe Foundation, Ketevan Vashakidze.

The first step in reforming the water resources management system is the establishment of the principle of basin management.

 What does a basin management system imply?

A basin management system implies the grouping of water resources of similar natural and ecological origin by basins and the establishment of a common management principle for each basin. The establishment of a basin management principle is necessary for the sustainable and rational use of water resources and the prevention of pollution.

“The idea is to consider water resources within the limits of a basin, which is necessary for proper water distribution as well as water quality management. For example, Rioni River begins in Racha, runs through Samtredia, Kutaisi, etc., and flows into the Black Sea. If, for instance, a large volume of water is used in Ambrolauri, the water will not be sufficient for other regions. The basin management principle will ensure us against such situations. Moreover, it averts conflicts among various industries, for example, between hydropower and irrigation industries. Moreover, the basin management principle considers groundwater in conjunction with surface water because we know that the pollution of groundwater entails the pollution of surface water; thus, the basin management principle is the most effective way for managing water resources,” Makarova said.

Before introducing this principle what is the practice of water use in Georgia?

The practice of using water resources in Georgia is the following: a user (a commercial entity) may use any volume of surface waters for free and unrestrictedly without any permit or license. It is different with regard to groundwater: use is unrestricted, but a fee is set for a cubic meter of water.

“That neither any fee nor limit is imposed on the use of surface water is not a result of a well-thought policy, but rather a consequence of legislative amendments. In particular, a license for the use of surface waters was abolished, which entailed the abolishment of the fee for the water use because the law on fees says that the fee is imposed on only those natural resources which require licensing,” said ₾:evan Pavlenishvili, an ISET researcher who worked on the study into economic instruments of water resources management within the framework of a Europe Foundation’s grant.

Economic instruments of water resources management:

The establishment of economic instruments is envisaged in the Association Agreement and is a step that follows the introduction of the basin management principle (water framework article 9).  According to the directive, the government of Georgia, on the basis of thorough analysis, shall set prices on the use and pollution of water resources.

The study conducted by ISET addresses the issue of establishing such economic instruments. Apart from describing the situation existing in Georgia, the study provides an overview of international practice and those economic instruments that are adequate for Georgia.

“We think that the most feasible instrument in Georgia over the next six years is the introduction of water use and pollution fees; however, the size of both fees must be set on the basis of thorough analysis and monitoring and following the basin management principle,” said Levan Pavlenishvili.


Apart from water use and pollution fees, there are other economic instruments, for example, the creation of water markets, that mean the sale of an ownership right on certain water resources. “This implies the creation of an incentive in the form of private ownership to encourage sustainable use of water; however, this is a rather difficult instrument and requires a thorough definition of the ownership right. Therefore, we do not consider the use of this instrument in Georgia appropriate in the short run,” Palavandishvili continued.

Water use fee:

In general, the water use fee is calculated based on the volume of water. “To determine the price of a cubic meter of water, it is necessary to study the water basin, to conduct its hydrological analysis, to study and analyze water users, demand for water, revenues; only after that the price of water must be determined,” the ISET study report states.

“At present, we do not know a real price of this or that water resource because the state has not conducted a study into its resources. Water is a natural resource that has created a certain market while the state has assumed the responsibility for this market, though actually it does not manage this resource. For example, instead of buying water from GWP, producers of soft drinks prefer to use groundwater as they pay a minimal fee for it; we have doubts that this fee does not reflect a real cost of water. To put this to rights, it is necessary to conduct analysis, study, monitoring, and then set a certain price for the water use,” Pavlenishvili said.  

Pollution fee

The effective legislation provides for penalties for water pollution, which are minimal (starting from GEL 5,000) and compensation for damages that is calculated according to a specific formula and represents such a complex mechanism that compensation reaches huge amounts that virtually nobody pays.

One of the gravest problems of pollution is in Bolnisi district where the heavy metals mining company, RMG (Rich Metals Groups), adversely affects three rivers: Poladauri, Mashavera, and Kazretula. These rivers are used for agricultural purposes, and, consequently, heavy metals that get into these rivers move into the food chain, thereby affecting the entire country of Georgia. A study conducted in 2016 by the Green Policy Platform states that the concentration of cadmium exceeded the permitted norm by 10 times in the river Kazretula, 9 times in Mashavera and 28 times in the lower course of the Poladauri.

A representative of RMG Gold, Mikheil Kvaratskhelia, refuses to recognize the legitimacy of this study. He says that, as of today, the waters of Bolnisi municipality no longer represent an acute problem. “During 2018, we implemented a number of measures to prevent pollution. Of four points detected as main sources of polluting, the works on two points have already been completed. By March 2024, we will have treating facilities, too,” Kvaratskhelia said. According to him, the National Environmental Agency conducts inspections in RMG’s territory twice a week. Moreover, the company monitors water in fifteen locations. However, the monitoring data is not publicly available.

Last year, RMG paid only two fines worth GEL 5,000 each and hopes that it will not have to pay any fines next year. “The threat of water pollution no longer exists unless there is some discharge in emergency or extraordinarily heavy rain,” Kvaratskhelia said. It is still unknown whether the company paid more than one million lari for the damage it caused to the environment in 2014 by discharging 500 cubic meters of acidic quarry waters into Kazretula River. Despite journalists’ request for information about this fact, the prosecutor’s office has not yet provided an answer.

Kvaratskhelia disaproves introducing a pollution fee as a new mechanism to protect the environment. “There is a principle of penalty, which is absolutely acceptable, and the principle of calculating damages, which merely needs improvement. I do not think that imposing a fee on contaminants below a permissible level is a correct move because this looks like legitimizing pollution,” he reckoned.

However, Levan Pavlenishvili believes that a pollution fee per unit of contaminant is the instrument that will compel businesses to undertake preventive measures to reduce pollution in the long term and, thereby, decrease the fee.

In Makarova’s view, this idea is reasonable, but small businesses are not ready for this type of fee. “Imposition of fee on pollutants will be a very heavy burden for small and medium size enterprises and, therefore, the government does not consider the introduction of pollution fee at this stage. As for the fee for water use, we work on this issue and will probably introduce it in the coming years,” Makarova said. Regarding the largest source of contamination — the problem of urban wastewater — the state will have treatment facility projects in all cities by 2022 and will complete treatment facilities in all cities by 2024, according to Makarova.

For water management to be up and running, it is important to monitor water quality and volume throughout Georgia. The ISET study notes that the situation in this regard has been improving since 2012, though a shortage of monitoring remains a serious challenge. According to the ISET study of 300 large rivers across Georgia, only 68 are monitored, while groundwater monitoring is conducted in only 51 locations. “Setting up basin management organizations and equipping the National Environmental Agency to enable it to collect relevant data requires GEL 40 million. If we want this system to operate similarly to that in developed countries, it is necessary to invest in it,” Pavlenishvili concluded.


Author:  Ketevan Maghalashvili

Photos by:  Natela Grigalashvili


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